Financial Services Committee
Subcommittee on Domestic and International
Monetary Policy, Trade, and Technology
Hearing on HR 5512
Ron Paul - Opening Statement
March 11, 2008
Mr. Chairman, I oppose HR 5512 because it is unconstitutional to delegate the
determination of the metal content of our coinage to the Secretary of the
Treasury. Under Article I Section 8 of the Constitution, the Congress is given
the power to coin money and regulate the value thereof. It is a shame that
Congress has already unconstitutionally delegated its coinage authority to the
Treasury Department, but that is no reason to further delegate our power and
essentially abdicate Congressional oversight as the passing of HR 5512 would
do.
Oversight by members of Congress, who have an incentive to listen to their
constituents, ensures openness and transparency. This bill would eliminate that
process and delegate it to unelected bureaucrats. The Secretary of the Treasury
would be given sole discretion to alter the metal content of coins, or even to
create non-metal coins. Given the history of Congressional delegation and
subsequent lax oversight on issues as important as the conflict in Iraq, it
would be naive to believe that Congress would exercise any more oversight over
an issue as unimportant to most members as the composition of coins.
While I sympathize with the aim of Section 4 of this bill to save taxpayer
dollars by minting steel pennies, it is disappointing that our currency has been
so greatly devalued as to make this step necessary. At the time of the penny’s
introduction, it actually had some purchasing power. Based on the price of gold,
what one penny would have purchased in 1909 requires 47 cents today. It is no
wonder then that few people nowadays would stoop to pick up any coin smaller
than a quarter.
Congress’ unconstitutional delegation of monetary policy to the Federal
Reserve and its reluctance to exercise oversight in that arena have led to a
massive devaluation of the dollar. If we fail to end this devaluation, we will
undoubtedly hold future hearings as the metal value of our coins continues to
outstrip the face value.
HR 5512 is a sad commentary on how far we have fallen, not just since the
days of the Founders, but only in the last 75 to 100 years. We could not
maintain the gold standard nor the silver standard. We could not maintain the
copper standard, and now we cannot even maintain the zinc standard. Paper money
inevitably breeds inflation and destroys the value of the currency. That is the
reason that this proposal is before us today.